Mortgage interest deduction

Any decline in home equity balances could be offset by higher demand for other types of consumer loans. The worry is that only borrowers with blemished credit will take out home equity loans, increasing banks’ risk.

With tax reform close to the finish line, bankers are still clear winners from the compromise worked out between House and Senate negotiators. But the bill includes some caveats that might give institutions pause.

Here's a look at the 12 housing markets with the largest percentages of mortgages over $500,000 — the new threshold House Republicans have proposed for the mortgage interest deduction in their tax plan.

A House Republican tax proposal that infuriated housing groups and sent homebuilder stocks sliding would only have a modest impact on the market for new homes and could end up being a net positive for the industry, according to Keefe, Bruyette & Woods analysts.

Top banking executives called the Republican tax plan an important first step toward tax reform and economic stimulus, but questions immediately arose about whether trade-offs and complexities in the bill would undercut it.